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Cold Days for Hot Fuel Ripoff | Oil Watchdog

Press Release

Cold Days for Hot Fuel Ripoff


Sat, Jan 26, 2008 at 5:48 pm

    Cold Days for Hot Fuel Ripoff

    1-26-08 by dugan


    Thursday in the California capitol was cold, windy and spitting rain. But the topic in a government meeting room was hot fuel, a national issue that will shoplift money from our wallets again this summer. We’ll all be buying gasoline that has heated up at the refinery and heated up more in the tanker truck, delivering less energy than we think we’re buying. It adds insult to the injury of gasoline that could cost $4.00 a gallon by May, even as energy costs help melt down the economy.

    When gasoline heats up, it expands. That means it loses a little energy per gallon. The energy loss amounts to 1% for every 15 degrees of heat above the national benchmark of 60 degress. That’s about $1.20 worth of energy lost per 20-gallon fillup when the gasoline is 90 degrees–not that unusual in warm states. In Arizona last summer, some stations were dispensing 105-degree gas, a $1.80 energy loss.

    It’ll matter even more when the price at the pump goes up as predicted in the spring. (Want to know more? Click here.)

    The meeting at the California Energy Commission was about whether the state’s consumers deserve a fix, or whether a a fairly simple adjustment will be too much "burden" on the oil industry. I’m glad I was there, along with a truckers’ representative. Otherwise it would just have been just the oil lobby and gasoline lobbyists in the room with the weights and measures fellows who will make the decision.

    The states’ weights and measures regulators know consumers are getting a raw deal. But on the national level, they haven’t yet had the will to fix it.

    California’s regulators were making moves to allow temperature-adjusted gasoline sales in California when the Legislature last year passed a rotten bill that snatched the issue away from the weights and measures agency. Now statehouse politicians who get oil industry contributions and are subject to relentless lobbying will make the final decision.

    We later found out that the lobbyists had actually written the bill, which was pushed through by the oil-friendly leader of the state Assembly.

    So the meeting in Sacramento was to form committees to carry out the "studies" and "analysis" called for by the legislation. It may be a losing effort, but I’m sticking with it so the lobbyists don’t get a free pass. At the meeting, the lobbyists were annoyed that Mr. Trucker and I responded to all of their objections. when I asked one of them for his card and offered mine, he snapped, "I know who you are." I guess that’s good.

    Everybody else in the gasoline sales chain gets a fair deal. Refiners sell gasoline to wholesalers with a temperature adjustment, meaning they add enough extra gasoline or diesel to make up for the expansion above 60 degrees. Wholesalers largely sell it to retailers with the same temperature adjustment. But when we put gasoline in our tanks, we get the same volume no matter what the temperature.

    The issue isn’t just the money. It’s that consumers have no way to judge what value they’re getting.

    When you buy a frozen turkey at the supermarket, the label tells you if water has been added, and how much. A can of olives can’t be 80 percent liquid. Tire sellers have to disclose tread life. A lot of life is made fairer by weights and measures rules.

    But for gasoline, the regulators only measure whether you’re getting a 231-cubic-inch gallon, not whether you’re getting a gallon’s worth of energy. You’d have to stick a meat thermometer in the tank to know the actual value of each gallon–not a tactic we’d recommend.

    Thanks to a revelatory 2006 series in the Kansas City Star, at least the hot fuel ripoff is getting attention. We intend to keep pushing until it also gets fixed. 

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